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Supervisors Approve Money-Saving Changes To County Pension Plans

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RIVERSIDE (CBS) — Riverside County supervisors Tuesday approved changes to their pension plan and the plans of other elected officials, managers and non-union employees that will require them to make their own contributions into retirement accounts, instead of taking the money out of the general fund.

The 4-0 vote — with Supervisor John Tavaglione absent — coincided with a decision by the supervisors to unilaterally impose terms of a new one-year contract with Service Employees International Union Local 721, with which negotiations over a new collective bargaining agreement bogged down after three dozen meetings.

Under the county’s terms, 5,881 SEIU-represented employees, who include clerks, nurses and 911 dispatchers, will be required to pay more of their gross earnings toward their retirement.

Union representatives told City News Service they had not been informed of the declaration of an impasse by the board and were calling on the county’s negotiation team to return to the bargaining table.

SEIU Local 721 released a statement calling it “unfortunate that the county has resorted to scare tactics and improper imposition to wrest concessions from its employees.”

“There’s going to be pain. We’re fooling ourselves if we think there’s not,” Supervisor Jeff Stone said during today’s meeting. “The more (money) we can save … the more jobs we can save in this county.”

The county is facing an $80 million budget shortfall in the next fiscal year and has an overall unfunded pension obligation of $540 million. During an earlier meeting, county officials estimated as many as 600 employees’ jobs
could be on the chopping block to bring the budget into balance in 2012-13.

According to county Human Resources chief Barbara Olivier, the pension modifications for board members, other elected officials, managers and non-unionized staff will be phased in over a year.

Under a system in place since 1998, the county has covered the entire amount of an employee’s payment into the California Public Employees Retirement System — 9 percent of a public safety worker’s pretax income, and 8 percent of other workers’ compensation.

The plan approved today requires that, beginning Dec. 1, board members, elected officials, managers and non-union staff pick up 4 percent of the Calpers payment. On June 28, they would begin paying the entire 8 percent.

For some employees on the lower end of the pay scale, the phase-in period will be spread out over two years to ease the transition. Olivier noted that some of those impacted earn less than $30,000 a year.

During the summer, the board imposed similar terms on the Riverside Sheriffs’ Association, a union representing more than 3,000 public safety personnel.

To mitigate the financial pinch of effectively cutting employees’ salaries, the board voted today to reinstate so-called “step” salary increases, which had been frozen as part of the county’s 2009 deficit reduction plan.

Each worker will be eligible for a salary step of 2.71 percent annually, unless that employee receives a poor performance review.

According to Olivier, the cumulative net savings from the changes to employer-paid contributions — factored with the pay increases — will total around $14 million over three years. Nearly 1,200 employees, including the
supervisors, will be affected.

The contract imposed on SEIU members mandates that they pay 3 percent of their pension costs in the current fiscal year, an additional 3 percent next year and 2 percent more in 2013-14. The change will net $23 million in savings to the county, according to Olivier.

Olivier told CNS that new terms could be negotiated when the county and union return to the bargaining table next summer. That exercise will be unnecessary if a majority of union members vote in favor of the county’s
conditions. SEIU will be polling members between now and Monday, Olivier said.

“Since 2009, SEIU 721 members in Riverside County have participated in significant concessions to help with the economic recovery of our county,” said Local 721 Chief Negotiator Wendy Thomas. “We have never been opposed to doing our share, such as furloughs and contributing to our own retirements.

However, we are also sensitive and concerned about the potential impact further cuts would have on lower-paid county workers and their … families.”

Thomas applauded the board for moving ahead with pension reforms that entail a top-down approach. But she said more could be done to achieve greater savings at the highest levels.

During today’s meeting, Stone quoted from a letter he’d received from an employee in which the person said he would be willing to accept “less pay over no pay at all.”

“I think many employees will support sharing the burden so we can preserve these jobs and weather this economic storm,” the supervisor said.

Supervisor John Benoit added that the pension overhaul is “painful.”

“But we are leading,” he said. “We are taking steps here that need to be done … We all need to share in the pain, and the purpose is to protect jobs.”